Two decades ago any researcher studying the agrarian scenario could not have missed the near ubiquitous possession of Parle G biscuits by the footloose migrants driven by crisis to travel distant lands in search of livelihood. The best-selling biscuit brand in the world was within the reach of the poorest who could scarcely afford for even one proper meal a day. Today, Parle-G biscuits or other variants manufactured by their competitors are almost conspicuous by their absence or by their presence only as a rare commodity. Popular demand for Parle-G has been worsening after India rolled out a nationwide goods and services tax (GST) in 2017, which imposed a higher levy on biscuits. The drastic fall in demand from poor consumers in rural India, which contributes more than half of Parle’s revenue has also forced the company to consider lay-off of thousands of workers. It is only part of the story that higher taxes forcing Parle to offer fewer biscuits in each pack hit demand from lower-income consumers in rural India. The bigger story that needs to be told is of falling incomes and distress of agricultural workers and peasantry who are unable to buy biscuits like before. The slowdown in economic growth has led to job-losses, increasing unemployment, falling incomes, demand constraint and malnutrition. A Budget in times of a recession and falling incomes would have done well to firstly acknowledge the mess that policies have created; then taken steps to boost rural incomes, increase purchasing power and thereby demand. The Budget presented read more like Marie Antoinette’s musings than any serious effort to address the crisis. A juxtaposition of the ground reality with the budgetary allocation will expose that the height of insensitivity shall compete with Marie Antoinette.
Distress-Driven Farm Suicides Continue Unabated
The BJP Government which had claimed its policies would put an end to farm suicides made a miserable attempt to shield it by not releasing the National Crime Records Bureau (NCRB) figures of farm suicides in a timely manner. The figures for 2016 have only been officially published in the fag end of 2019 and that of 2017 have been secretly put on the NCRB website only in January, 2020. Bihar and Bengal have been reporting zero farm suicides although organisations like AIKS have recorded distress-driven suicides by the peasantry in these two States. Despite the fact that many States are either under-reporting or blatantly lying, even these figures show a clear trend. In the first four years of the BJP Government nearly 47,000 farm suicides were reported with Maharashtra and Karnataka accounting for the highest number of suicides. Another trend was a 36 percent increase in suicides by agricultural workers in 2016 and the 2017 figures also show high incidence of suicides among them. This is a direct result of insensitive handling of recurring droughts and natural calamities, absence of employment opportunities in the aftermath of demonetization and due to cut in allocation for MGNREGA. The fact that suicides for agricultural workers has increased shows that drought affected them badly and MGNREGA could not provide them relief. In Tamil Nadu NCRB data for 2016 puts total number of farm suicides as only 381 while in reality at least 400 farmers committed suicide over & above high incidence of suicides by distressed agricultural workers in the drought year. Punjab figures are also disputed as independent studies had shown over a thousand suicides in that year while the NCRB figure is not even a quarter of that. The BJP Government continues in the denial mode and maintains criminal silence on the matter.
Farmers’ Woes Double as Incomes Dwindle
If one combines allocations for agriculture and allied activities, fertiliser subsidies, irrigation, rural development and land resources, one finds that the Revised Estimates for the current year is almost 25 thousand crores less than what was originally budgeted for this year. In fact, the budget documents show that the Revised Estimate for almost every scheme of the Ministry of Agriculture and Farmers’ Welfare has been reduced in the current year, and that these cuts are maintained for the coming year. This being the case it also talks of a 16-point agenda to double farmers’ incomes by 2022 though neither the Government has not placed on record the progress in this regard in the last four years that they have been pompously claiming so nor have they followed it up with commensurate allocation. The Economic Survey nailed the lie as its data shows that the growth rate of Gross Value Added (GVA) in agriculture had drastically fallen from 6.3 percent to 2.8 percent in the intervening period. This is a pointer to the dismal state of farm incomes which have actually been continually falling. What are the components that lead to a scenario of falling farm incomes? Increasing costs of production due to increasing input costs and cuts in subsidies, unremunerative prices, absence of assured procurement even at these prices, failure to compensate effectively for crop losses or insure against yield or income losses due to weather or market conditions and absence of alternative employment guarantee for agricultural workers in times of drought or natural calamities. This scenario is only worsened in conditions of rising prices, increasing expenditure on health and education and absence of social security schemes. The 16-point agenda put forward for agriculture does not come with concrete steps to address these issues and the Budget we can see will only accentuate the crisis of the rural masses.
BJP and Narendra Modi’s most attractive promise of 2014 elections for farmers was that the Minimum Support Prices would be fixed at one and a half times the comprehensive cost of production (C2+50% where C2 implies comprehensive cost including all actual paid out costs plus imputed value of family labour, rental value of own land, interest on value of own fixed capital assets excluding land). It has been repeatedly asserted that the Commission on Agricultural Costs and Prices (CACP) cost calculations are far below the actual costs and do not reflect ground realities. The dismal state of procurement also makes even these low prices inaccessible to the farmers and it remains only notional. The Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) was launched amidst massive protests by the peasantry claiming that no farmer would be denied MSP. However, under this scheme in the first year, 2018-19 the expenditure was merely Rs.4,100 crores. The allocation was drastically cut in 2019-20 to Rs.1500 crores and merely Rs.321 crores were spent. If the scheme had to effectively bail out farmers and ensure that the MSP would be guaranteed, the allocation should have been over 1 lakh crores. When PM-AASHA was launched it was claimed that it would include three components namely a Price Support Scheme, Price Deficiency Payment Scheme as well as a “robust’ procurement mechanism through a Private Procurement and Stockist Scheme, most of which have remained only on paper. The Budget allocation in 2020-21 is only Rs.500 crores only, a substantial part of which would be spent on advertisement and propaganda. Assured procurement of farm produce remains a far cry and nothing has been done to address the problem.
If we look into the MSP of Kharif and Rabi crops announced it will not be difficult to understand why farm incomes are dwindling even as costs are increasing. For Kharif Marketing Season 2019-20 it announced a meager 3.7 per cent hike in prices of paddy or merely an increase of Rs.65/- per quintal. However, these prices are based on gross undervaluation of costs. For instance the projected costs for Kharif Marketing Season 2018-19 for paddy as per the State Government of Punjab was Rs.2490/Qtl while the Commission on Agricultural Costs and Prices (CACP) calculation for Punjab was Rs.1174/Qtl; not even 50 percent of the projected costs put forward by the State Agriculture Department. The C2 costs as per BJP and JD-U ruled Bihar for paddy is Rs.1605/Qtl but CACP considers it as Rs.1398/Qtl only. Odisha State projection is Rs.2344/Qtl while CACP considers it as only Rs.1713/Qtl. This is the case in most crops. Even taking the C2 costs as arrived by the CACP that is Rs.1,560/Qtl the C2+50% would come toRs.2,340/Qtl. But the MSP announced is only Rs.1,815/Quintal. The claims that MSP was in line with the principle of fixing MSPs at a level of at least 1.5 times of the all India weighted average cost of production is a farce. First and foremost the Government has now altogether discarded the C2 cost and stuck to A2+FL which are way below C2 costs. The MSP for the Rabi Marketing Season (RMS) (2020-21) also follow a similar pattern. The weighted average C2 cost for wheat as per the State Government projections provided by the Commission on Agricultural Costs and Prices (CACP) is Rs.1848/Qtl. The Government took Rs.923/Qtl as the cost of production, implying 50 percent below the C2 costs projected by the State Governments and also about 36 percent below CACP C2 projection of Rs.1425/Qtl. Similarly for all crops the MSP announced has been on the basis of depressed costs. For every Rabi crop the MSP fixed is way below C2+50% whether one takes the CACP projections or the projections by State Governments.
The promise of reducing costs of production by subsidising inputs has been long discarded in favour of deregulation of inputs to facilitate corporate profits. This Budget has seen drastic cut in fertiliser subsidies. Even in nominal terms, the allocation towards fertiliser subsidies for the coming year is 11 per cent less than the allocations for the current financial year. The real decline is likely to be even higher. This will directly result in increasing the cost of fertilisers and reduce farmers’ income. The budget also has no proposals for expanding access to irrigation, providing support to sharecroppers or ensuring livelihood security of rural workers.
Grameen Agricultural Markets (GRAM) was also announced in 2018-19 for better marketing facilities and upgradation of 22,000 rural haats. After two years, the implementation has not begun and only 0.5 per cent of the allocated Rs.2,000 crores have been spent. The much-hyped “Dairy Infrastructure Development Fund” of Rs.10,881 crores announced three years back has however spent only Rs.440 crores. This Budget has only Rs.60 crores allocated under this head, clearly pointing to the callous attitude to the Dairy sector. Allocation for Rainfed Area Development and Climate Change was also reduced in the Budget.
Even as farmers’ organisations like the All India Kisan Sabha pointed out the importance of remunerative prices one and a half times the cost of production accompanied by assured procurement the BJP Government came up with the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) during the last Budget promising Rs.6000 per year to farmers owning up to 2 hectares. For 2019-20, Rs.75000 crores was allocated for PM-KISAN and it was claimed that 14.5 crore farmers would benefit from the Scheme. On the eve of the last Parliament elections and even on voting day many farmers got the first instalment of Rs.2000/-. However, after one full year of its implementation the figures coming out point to the fact that not even one-third of the intended beneficiaries received Rs.6000/-. According to data provided by Ministry of Agriculture and Farmers’ Welfare in response to an RTI query, till 30th November, 2019 only around 26 per cent received all three instalments. The sense of urgency that was displayed before the Lok Sabha elections did not last after the BJP victory. Of the intended 14.5 crore beneficiaries 7.6 crore farmers or a little over 52 per cent of the intended beneficiaries received only one instalment of Rs.2000/-. The Government claims that more than Rs.48,937 crore has been released under the Scheme though Rs.75,000 crores were allotted in the first year. However, if 14.5 crore farmers were to be given Rs.6,000/- the amount required would have been around Rs.87,000 crores. Millions of tenant farmers, share croppers and landless are already excluded from the Scheme. In a recession year when the Budget was expected increase allocations to bring even the hitherto excluded poorer sections of the peasantry under its ambit to put more money into their hands to boost purchasing power and demand, the allocation for PM-KISAN is still retained at Rs.75,000 crores.
Another important component of rural incomes is that of the agricultural labour. We have also noted high unemployment and an increase in suicides by agricultural workers. While the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) should have been expanded to provide at least 200 days of employment per year with increased wages, the allocation has been slashed from Rs.71,001 crores (Revised Estimate 2019-20) to Rs.61,500 crores in 2020-21, a cut of Rs.9,500 crores when the total demand from States amounts to nearly Rs.1 lakh crores. Alarmingly, in times of increasing hunger and malnutrition, the Budget has drastically cut food subsidies from 1.84 lakh crores in Budget Estimate of 2019-20 to merely Rs.1.16 lakh crores in 2020-21. The revised estimates for food subsidies show a decline of about 41 per cent over the budgetary allocations. The budgetary allocation for this year is 18650 crore less than the allocation for last year. Allocations to Food Corporation of India (FCI) for lifting the grain for distribution under National Food Security Act are being cut down. FCI is forced to borrow to meet the shortfall, with the aim of window-dressing fiscal deficit numbers. This has led to a massive debt burden of over 2 lakh crores on FCI which plays a critical role in implementing the National Food Security Act and maintaining food sovereignty of the country.
Insuring Corporate Profits at the Expense of Farmers
In times when farm incomes are unremunerative a sense of security could have been provided by the Pradhan Mantri Fasal Bima Yojana (PMFBY). Insurance companies are raking in profits at the expense of farmers who are denied compensation for crop losses. According to RTI information for 2018 Kharif the Insurance companies collected a premium of Rs.20,747 crores but only settled claims of Rs.7,696 crores. After three years of raking in huge profits without giving substantial benefit to farmers, the Insurance companies argued that 2019 was a bad year and claims may exceed premium collected in 2019. The heavy rains leading to floods had resulted in huge crop losses in a year where already many regions also suffered losses due to drought like conditions. States of North East, Bengal, Bihar and Odisha also suffered losses. Kisan Sabha had to organise continuous protests even to ensure that compensation is paid by the companies which find different ways of evading their responsibility. As per provisional figures released by the government, in 2018-19, the total premium collected was ₹29,035 crore, with farmers contributing Rs.4,889 crore. As many as 5.64 crore enrolled for the scheme, covering the gross cropped area of 30 per cent. While gross premium collected in 2016-17 was Rs.22,008 crore, the claims pay-out was only Rs.16,617 crore and in 2017-18 as against premium collection of Rs.25,481 crore, the insurance firms paid out Rs.21,705 crore. In 2018-19, they collected Rs.29,035 crore and only Rs.14,246 crore had been paid in claims so far. There are a large number of outstanding claims, whose pay-outs are pending. Many districts have several crops with premium rate of around 50 per cent and above. Cotton in Porbandar, groundnut in Rajkot in Gujarat and Bajra in Barmer district of Rajasthan are examples. Also only 35-40 districts account for nearly 50 per cent of all claims. Only 30 per cent of the gross cropped area is insured. Clearly, the Scheme is not universal and farmers are not being effectively compensated for the losses.
Neither has the Budget made credit accessible at affordable interest rates nor has it made any provisions for freeing farmers from indebtedness. As in previous years thousands of crores in the name of agriculture are going into few hundred accounts, clearly indicating agribusinesses are benefiting at the expense of farmers. The Budget also has changed the direction of National Bank for Agriculture and Rural Development (NABARD) refinance operation to increase focus on Non-Banking Financial Companies (NBFCs). This is in direct contravention of basic principles for which NABARD was formed in 1982 to have a strong focus on small and marginal farmers. Already, NABARD refinance to Reliance Capital to the extent of Rs.1100 crore has reportedly turned into NPA. NABARD has also reportedly financed huge amount to Dewan Housing Finance Ltd (DHFL) which has also turned into NPA. Clearly, the BJP Government stands for corporate profiteering at the expense of farmers.
Rightward Shift and Rising Struggles
The BJP Government has taken an even more rightward shift in economic as well as political arena. The failure to curb recession, unemployment, price rise and falling demand has been accompanied by clear efforts to polarise the society and carry forward its communal Hindutva agenda. The decision of abrogation of Article 370, the Citizenship Amendment Act and criminalisation of Triple Talaq and attacks on constitution as well as democratic rights are all being followed up with draconian acts and physical attacks against opponents too. Undeterred by these a beautiful resistance is being built across the country challenging the Hindutva agenda and the perilous economic policies. The Strike called on 8th January, 2020 by working class was actively supported by a Grameen Bharat Bandh where the peasantry and oppressed joined in millions making it the biggest Strike in recent history. Protests against CAA-NPR-NRC are also a fitting answer to the divisive agenda of the BJP-RSS. On 5th February, 2020 massive united protests were held across the country against the Budget and more protests are planned by All India Kisan Sangharsh Coordination Committee on 13th February. A never-before kind of solidarity is being built networking different organisations and a prolonged movement for a pro-people alternative is shaping up.
A revised version of the article was published in the Frontline.